Dekker v. Vivint Solar, Inc.

Background

Vivint Solar installs solar panels and sells the energy they produce under residential power purchase agreements. Dekker alleged that Version 1 of Vivint’s agreement contains unlawful liquidated-damages provisions—contract terms requiring specified payments after a breach that may be unenforceable penalties.

Dekker asserted a claim under California Civil Code section 1671 and claims under California’s unfair-competition law, section 17200, and the Consumer Legal Remedies Act. The latter two claims were based on the alleged section 1671 violation. Dekker sought an injunction invalidating the fee provisions and stated that she was not seeking classwide monetary relief.

Earlier in the case, arbitration rulings affected several plaintiffs, and Bautista later settled with Vivint and left the case. Dekker became the only named plaintiff. The opinion states that the action continued in federal court and that Vivint separately moved for partial summary judgment on issues related to the requested injunction; that motion was addressed in a separate order filed at the same time.

Class Definition and Legal Standard

The court declined to certify Dekker’s proposed class as written. It instead certified this class under Federal Rule of Civil Procedure 23(b)(2):

“All persons in California currently in privity of contract with Vivint Solar because they are subject to Version 1 of the Residential Solar Power Purchase Agreement.”

For certification, Dekker had to satisfy Rule 23(a)’s requirements of numerosity, commonality, typicality, and adequacy. She also had to show under Rule 23(b)(2) that Vivint acted on grounds generally applicable to the class and that a single injunction or declaratory judgment could provide relief to the class as a whole.

Rule 23(a) Requirements

Numerosity. Vivint did not contest numerosity. The court noted evidence of 1,064 California Version 1 accounts with installed systems and permission to operate, although some accounts involved transfers or assignments. After excluding people no longer in a contract relationship with Vivint, the number of active Version 1 agreements still satisfied the numerosity requirement.

Adequacy. Vivint argued that Dekker was unfamiliar with the litigation and therefore could not adequately represent the class. The court acknowledged that her testimony showed limited knowledge of the claims, remedies, pleadings, and filings. Nevertheless, the court found that Dekker understood the core issue, had no demonstrated conflict with other class members, and had continued to litigate the case vigorously. The court found her adequate, while advising her counsel that she must continue to understand and control major litigation decisions.

Commonality. The court held that common questions could drive the litigation. All class members were subject to the same Version 1 agreement provisions, and the legality of the default and transfer charges could be examined using common evidence.

The court explained that California’s reasonable-effort test asks whether actual damages were impracticable or extremely difficult to determine and whether the charge represented a reasonable effort to estimate fair compensation. The court also noted that a contract term may instead be a valid alternative form of performance if it gives the customer a rational choice, rather than imposing an additional charge for breach.

Vivint argued that determining whether the charges were valid alternatives or unlawful liquidated damages would require individualized inquiries about each solar system’s size, value, revenue, and costs. The court rejected that argument at the certification stage. It reasoned that the relevant question is viewed when the contracts were made and that the parties could use common evidence concerning Vivint’s practices and motivations. The court also stated that the reasonable-effort inquiry focuses on Vivint’s actions and omissions concerning the class as a whole, not on a house-by-house inquiry.

Typicality. Vivint argued that Dekker’s claims were untimely. The court rejected that argument for purposes of typicality because Dekker remained in a contract relationship with Vivint and was still subject to the challenged default and transfer provisions. The court discussed the continuing-accrual doctrine, under which a new limitations period may arise each time a recurring obligation is allegedly violated. The court concluded that Vivint had not shown that limitations issues unique to Dekker would prevent classwide litigation.

Rule 23(b)(2) Requirement

The court found that Vivint had acted on grounds generally applicable to the class because every class member was subject to identical Version 1 provisions. The court also found that the requested injunction could apply to the class as a whole after narrowing the class definition.

The revised definition excluded people who were no longer in privity with Vivint, including people who had already paid certain fees and transferred their agreements or had otherwise released relevant claims. Customers who remained in privity under Version 1 were subject to both the default and transfer provisions, making the requested prospective relief appropriate for the class as a whole.

Disposition

The court GRANTED Dekker’s motion for class certification under Rule 23(b)(2). It certified the revised class, appointed Dekker as class representative, and appointed Matern Law Group, PC as class counsel. The class definition applied for all purposes, including settlement.

The court ordered Vivint to submit a list of people who qualified as class members by April 8 at noon. It also required the parties to jointly submit a proposed class-notification plan, including notice by first-class mail. The court DENIED AS MOOT Dekker’s evidentiary objections because it had relied on none of the challenged portions of Vivint’s declaration. The order certified the class but did not finally decide whether Vivint’s fee provisions violate California law.